The Meteor FTSE/S&P Super Step Down Kick Out Plan is a maximum eight year three week investment offering a potential gross investment return of 6.50% per annum.
The capital and investment return are linked to the performance of the FTSE 100 Index and the S&P 500 Index (each ‘an Index’, collectively ‘the Indices’).
The Securities for this Plan will be issued by Morgan Stanley & Co International plc
This is a capital-at-risk Plan and the investor may lose some or all of their money if the Final Level of one or both Indices is below 65% of its Opening Level. In this case, the reduction in the money invested in the Plan at the Maturity Date will equal the same percentage that the Final Level of the lower performing Index is below its Opening Level.
If the Closing Levels of both Indices on any Measurement Date before the Final Measurement Date are at least equal to their respective Reference Levels, the Plan will kick out, i.e. mature early, and make a gross investment return of 6.50% of the money invested for each year that the Plan has been in force.
The first Measurement Date will be on 15 March 2021 one year after the Start Date.
The Reference Levels are as follows: year 1 at 105%; year 2 at 100%; year 3 at 95%; year 4 at 90%; year 5 at 85%; year 6 at 80%; year 7 at 75% and year 8 (Final Level) at 65%.
If the Plan matures early on a Measurement Date, the investment return payable will be: 6.50% at year 1; 13% at year 2; 19.5% at year 3; 26% at year 4; 32.50% at year 5; 39% at Year 6 and 45.50% at year 7.
If the Closing Levels of both Indices on any Measurement Date before the Final Measurement Date are below their respective Reference Levels, no investment return will be made and the Plan will remain in force.
If the Final Levels of both Indices are at least equal to 65% of their respective Opening Levels, the Plan will make an investment return at the Maturity Date equal to 52% of the money invested in the Plan. If the Final Level of one or both Indices is below 65% of its respective Opening Level, no investment return will be payable at the Maturity Date.
It is possible that the Counterparty could collapse or fail to make the payments due from the Plan. If this happened the investor would lose some, or all, of the money they invest in the Plan, as well as any investment return to which they might otherwise have become entitled.
It is Meteors understanding that any investment return from this Plan will be subject to Capital Gains Tax.
Other Key Information
English law governed notes
Morgan Stanley & Co. International plc (www.sp.morganstanley.com/eu)
The product is designed to provide a return in the form of a cash payment on termination of the product. The timing and amount of this payment will depend on the change in value of the preference shares, which in turn will depend on the performance of the underlyings. The product has a fixed term and will terminate on the maturity date, unless terminated early. If, at maturity, the worst performing underlying has fallen below its barrier level, the product may return less than the product notional amount or even zero.
Early termination following an autocall: The product will terminate prior to the maturity date if, on any autocall observation date, the reference level of the worst performing underlying is at or above the relevant autocall barrier level. On any such early termination, you will on the immediately following autocall payment date receive a cash payment equal to the applicable autocall payment. The relevant dates, autocall barrier levels and autocall payments are shown in the table(s) in the key information document.
Termination on the maturity date: If the product has not terminated early, on the maturity date you will receive:
1. if the final reference level of the worst performing underlying is at or above its barrier level, a cash payment equal to GBP 1.00; or
2. if the final reference level of the worst performing underlying is below its barrier level, a cash payment directly linked to the performance of the worst performing underlying. The cash payment will equal (i) the product notional amount multiplied by (ii) (A) the final reference level of the worst performing underlying divided by (B) its strike level.
Investors should note that the payments described above are based on the expected value of the preference shares. Therefore any return you may receive on the product depends directly on the value of the preference shares. As such, your return is only indirectly dependent on the underlyings.
Under the product terms, certain dates specified above and below will be adjusted if the respective date is either not a business day or not a trading day (as applicable). Any adjustments may affect the return, if any, you receive.
The product terms also provide that if certain exceptional events occur (1) adjustments may be made to the product and/or (2) the product issuer may terminate the product, as applicable, early. These events are specified in the product terms and principally relate to the product and the product issuer. The preference shares in turn contain provisions allowing the preference shares to be adjusted or terminated early in the case of certain exceptional events, in particular relating to the underlyings. Any such adjustments or early termination are likely to affect the amount and timing of return you receive under the product, meaning the return (if any) that you receive on such early termination is likely to be different from the scenarios described above and may be less than the amount you invested.
The product is intended to be offered to retail investors who fulfil all of the criteria below:
♦ they have advanced knowledge and a comprehensive understanding of the product, its market and its specific risks and rewards, with relevant financial industry experience including either frequent trading or large holdings in products of a similar nature, risk and complexity, either independently or through professional advice;
♦ they expect the movement in the underlying to perform in a way that generates a favourable return, have an investment horizon of the recommended holding period specified in the key information document and understand that the product may terminate early;
♦ they accept the risk that the issuer could fail to pay or perform its obligations under the product and they are able to bear a total loss of their investment; and
♦ they are willing to accept a level of risk to achieve potential returns that is consistent with the summary risk indicator shown in the key information document.
The product is not intended to be offered to retail clients who do not fulfil these criteria.
Please ensure you have read and understood the important documents contained on this page before investing.
To gain a full understanding of this Plan it is important that you read the brochure carefully, including the product risks and terms and conditions. If you are unsure about any aspect of this investment product, please seek financial advice to ensure the Plan suits your requirements and overall investment planning.
Moneyworld does not offer investment advice. The information in this brochure does not constitute tax, legal or investment advice. Please read our terms of business before investing
How do I invest?
Our fee is just 0.5%. This can be deducted from the investment or paid by enclosing a cheque to Moneyworld.
Important Plan Dates
Closing Date: 11 March 2020
ISA Transfer closing date: 26 February 2020
Other application form
Is the Meteor FTSE/S&P Super Step Down Kick Out Plan right for me?
A typical investor who invests in this Plan will:
♦ Be an Informed or Advanced Investor, with appropriate knowledge and experience of equity- based investments;
♦ Like investments that provide known returns based on pre-determined market outcomes;
♦ Want the potential to secure an investment return above that available from a deposit-based investment and acknowledge and accept the level of risk, identified by the Summary Risk Indicator set out in the Key Information Document (KID);
♦ Be willing and able to tie up their money for the term of the Plan for the objective of capital growth;
♦ Accept that they could lose money and be able to afford to do so;
♦ Understand that in the event of a loss that this loss would be at least 35% of the money they put into the Plan, and could be considerably more, and in extreme circumstances they could lose all of their money;
♦ Understand that any investment return is dependent on the performance of the Indices, which is calculated on set dates, and accept they might not get any investment return at all;
♦ Know that the levels of the Indices can fall but do not expect the fall to be more than 35% of their respective Opening Levels at the Final Measurement Date;
♦ Appreciate the importance of having a spread of investments to reduce concentration risk;
♦ Know and accept that inflation reduces the real value of money and what it can buy;
♦ Understand that equity markets are affected by economic and political events nationally and globally;
♦ Accept that if the Counterparty defaults they could lose all their money and any investment return and that they would not have any recourse to the FSCS.